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ขององค์กรปกครองส่วนท้องถิ่น

development and growth of the local economy. However, there is no specific formula for local
economic development because local communities are facing different problems and to rectify

the problems is to select appropriate tools and strategies for economic development in the
locality.

Strategies and Tools for Local Economy Development

Strategies are various in economic developments. The main strategy is to have at least

three aspects as the follows:

1) Fiscal incentives - The financial incentives are strategically important and popular in

many areas. In the implementation of the strategy, there are three main instruments.

= Temporary reduction or exemption of local taxation such as property tax,
corporate income tax, or the omission of certain charges to the local factory or

business in the initial phase of the operation.

= Making the access to capitals available such as bonds to finance economic
development projects in the area. The bonds are the capital with low interest

rates and long maturity or other means to access to capitals.

= Tax Incremental Financing (TIF) is an important tool for local economic
development in the United States. The principle of the TIF is to use the

increment to develop or expand the TIF district, such as revenues from the
expanded base of taxation, from income tax, from property tax due to higher
property values. The increment is spent to develop the public services in the

TIF district only, not others. TIF may be used to improve the development of
slums in the city by expanding housing opportunities and creating jobs in the
districts of the United States.

Example

South Korea: offering financial incentives to attract foreign investment, such

as reducing the corporate tax rate, dividend tax, property tax, and registration fee
for foreign companies who invest in the country.

Vietnam: Vietnam Competitiveness Initiative (VNCI) is to promote local

economic development by focusing on the development of Small & Medium-sized
enterprises: SMEs with the policy reform and access to financing support for the

SMEs.